SPISpy

SPISpy Freebie.. .Short the DAX, NOW.

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This is too easy… the "Dumb Money At Work" sign needs to be put out.

I know, I know… SPISpy is not generally DAX-oriented. But I'm being nice.

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DAX Short Panning Out Niiiice

DAX short entry is panning out, irrespective of whether it was entered based on "Freebie" from Dec 30th (DAX at about 5970) or from this twitter twatt ("DAX might open with a pop… if can get short above 6000 that would be one of the best things evah." – Dec 30th at 8:40 P.M. [DAX was closed… opened and popped above 6000 on Jan 4th]).

As of Friday that short was up over 100 points irrespective of which entry was used: that's €2500 per €17.3k margin … of course no exit target was given to free-users (only USSpyers got the targets: they were out at the 100-point target).

This trade will probably last half the year and quintuple the margin required to enter it. If you didn't action it at the time, it makes no sense to enter it now. There will be a bounce at some stage, so wait for a re-entry.

T3 still not hit yet…

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Pity… got the 'kiss' and bounce, but from a fair way above the third SPISpy target (T3). [Remember, the SPISpy from Monday was a short off 4940]

Still, the third contract of a 3-lot is up over 100 points ($2500) as I write this. Add that to the $1375 on the first two contracts, and profits on a 3-lot are nearing $4k in a little under two sessions.

Given that a SPISpy subscription is $150 a month, I reckon it can be declared value for money.

Second Target (40pts) Hit…

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The short off 4940 just tagged its second target (the second-lot target for those trading 2 lots); thus 2-lot traders have snaffled $1375 in profits (15pts on the firsst lot, and 40pts on the second) in under a session.

The outlay for the trade: $15k (if you're forced to pay full-strength overnight commissions, $7k if you have a deal with a decent broker)… thus the return was a little over 9% in just under a day for those with no deal, and a little under 20% for those who use a decent low-margin broker.

SPISpy: Another Winner…

As far as the SPISpy was concerned. an issue had been gnawing away at the brain of your Beloved GT.

This issue stemmed from the fact that after several false starts, the most recent multi-lot SPISpy had finally given 3-lotters something to ride – but that very success was depriving one- and two-lotters from getting back on board.

For those who aren't familiar with it, SPISpy is the short-term SPI trigger setups.

In the usual course of events, the trigger e-mail gives an entry (direction, and an entry time or entry level if it's not 'NOW'), but the exits are three-tiered: there is a first target (for people only trading one lot; a second target (for those trading 2 lots or more) and a third target. These are T1, T2 and T3 in the table below.

Everyody – with no exceptions – is supposed to remove part of their position at the first target, part of their position at the second. If you're trading 2, then you're out completely when the second target is hit; if you're trading 3 (or multiples thereof) you are supposed to close 1/3rd at target 1, 1/3rd at target 2, and leave the rest to run.

Usually once the second target is hit, people trading multiples of 3 lots are supposed to initiate a protective stop at their entry level – effectively locking in profits from the first two-third of the position, and ensuring zero losses on the remainder..

The logic is as follows: if you trade one lot, you've probably got less budget for risk, and plus you can't use the profits from one part of the position to fund increased risk-taking with the second unit. The more units you can trade, the more you can use part-position profits to underwrite the last portion of the position.

Anyhow… the first target is usually modest – as little as 6-10 points, but sometimes larger (the recent trades have had 30- and 50-point first targets, respectively). Second targets are usually 10 to 20 (but the last two trades were 60 and 100, respectively) and third targets are often 'open', indicating that the protective stop is in effect but there is no distinct target.

Until the last SPISpy signal, these third-lot 'remainders' had been stopped out with zero gain – after hitting the second target, the market had reversed and the third part of 3-lot position was closed with no gain… thus 3-lotters were experiencing lower average ratesof return than 2-lotters – they were making the same profits, but on 150% of the margin.

But the most recent 'normal' trade has more than fixed that… the existing 3rd lot is up a little over 300 points (last night it was up a little under 400 – that's $10k per contract on the third lot alone). Today I sent out a supplementary that was only for those trading less than 3, and was specifically only for one unit.

Anyway… here's the breakdown of SPISpy results since the start of September. Of course you must bear in mind that you have to deduct the onerous $150 per month subscription from the profit numbers.

Date Entry T1 T2 T3 Date T2 Hit
SPISpy Results – Sept012009 – present
Sep 8 4540 10 20 Open Sep8
Sep 10 4568 8 20 Open Sep10
Sep 11 4595 20 50 Open Sep14
Sep 16 4655 30 60 Open Oct6
Oct 14 4835 50 100 Open* Oct28
Nov 4 4539 6 n/a n/a Nov4
Profit per segment (points)   124 250 300*  
Profit per segment ($)   3100 6250 7500  
Total Profit – all units ($)   3100 9350 16850  

A green cell indicates that the target was hit; a blue cell indicates that the third portion of the trade was eventually closed with zero gain. A red cell would indicate a loss, but there haven't been any. The asterisk next to the third segment of the Oct14 trade indicates that the third segment is still open, with profits of a little over 300 points ($7500).

Today’s Outcomes

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Today’s closed trades (targets as detailed below) were from Friday’s entry, which was at 4595 as the e-mail below indicates: (more…)

OzRant: SPISpy Correction…

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I said in today’s OzRant that the SPISpy first target had been hit for CFD traders but not for SPI traders. I was wrong… CFD and SPI traders both got their exits at the same time.

Thanks to a SPI-trading subscriber for the correction… my data feed had stalled and I didn’t realise it.

So… chalk up another $200 (on one contract) for the SPISpyers… that’s $450 on a one-lot, in two days, without ever holding a position overnight.

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